Lawmakers and consumer groups want patients better protected

1of 13Ava Pettit, 8, left, watches TV with her sister, Mia Perez, 17, right, Tuesday, June 27, 2017 in Webster. About a year ago the family dog, Zoe, bit Ava in the face while jumping for a treat. Ava's parents rushed her to a hospital in their insurance network, but while there, four out of the five doctors who treated Ava were not in network, leaving the family with a $5000 bill. The family ended up paying $3600 after negotiations. ( Michael Ciaglo / Houston Chronicle )Photo: Michael Ciaglo, Staff

10of 13Sam Schmella, right, plays with one of her twins, Neil Schmella, 2, with her husband, Stew Schmella, left, and Laney Schmella, 2, in Houston. Sam and her husband went over all charges and doctors before she underwent a scheduled gall bladder surgery and were told they would be covered by insurance. After the surgery, she received a bill for $4,000 because a surgical assistant in the operating room was out of network.Photo: Michael Ciaglo, Houston Chronicle

Two Texas lawmakers said Tuesday they would consider changing state law to better protect patients caught in the fight between doctors and insurers.

The legislators joined a chorus this week of consumer and patient advocacy groups, along with national health policy experts, who are dismayed by a system that forces unsuspecting patients to pay significantly higher rates from out-of network doctors even at in-network hospitals.

Under a multimillion-dollar business practice called balance billing, doctors can demand that patients make up what insurance companies do not pay. In some cases, emerging evidence indicates doctors may be staying out of network intentionally to charge more and increase profits.

In Texas, unlike in other states, it is up to patients who feel wronged to initiate a billing mediation between warring doctors and insurers, potentially putting themselves in the middle.

"There's no genuine need for them to be involved," said John Smithee, R-Amarillo, former head of the House's Insurance Committee and longtime champion of patient protection against surprise out-of-network medical bills. He said he would back a law change to remove patients from the fight.

State Sen. Larry Taylor, R-Friendswood, issued a similar statement. "I would be happy to consider further changes to ensure that patients who go to network facilities do not have to be burdened with unexpected bills."

Balance billing will be discussed at a Dec. 6 public hearing by the House insurance committee in Austin.

Both lawmakers have indicated they would be open to removing patients from the mediation process after an investigation of billing practices called "Blindsided" appeared Sunday in the Houston Chronicle.

'Games being played'

In "Blindsided," doctors argued that having patients involved in the reimbursement battle with insurers can help extract higher payments.

Readers reacted angrily across social media in the days since publication.

"This is just not right and should not happen in our state. These out-of-network games being played in emergency rooms are costing Texans thousands of dollars and the #txlege needs to do something about it," read another.

"Forcing patients to be in the middle is both cruel and greedy," said Vivian Ho, a health economist at Rice University's Baker Institute of Public Policy. She said in an interview it was using patients as "human shields."

Smithee agreed. Patients are "dealing with two fairly sophisticated parties, and they are usually much less sophisticated. There's no reason for them to be there." He accused both doctors and insurers of "using patients as a bargaining tool."

Florida, California, Illinois and New York have all passed laws to get patients out of the mediation process. In those states, if patients go to in-network hospitals for emergencies they are charged an in-network rate regardless of the doctors' insurance status. If doctors and insurers want to dispute the bill they do so separate from patient involvement.

Not all state lawmakers, though, are completely onboard with a potential change.

Dr. Tom Oliverson, an anesthesiologist and a Harris County Republican legislator who serves on the House insurance committee, is wary of any move to remove patients from the process without fuller study on how it might affect health care costs.

"You could certainly do that because other states have done it," he said Tuesday. But he added, "It is hard to answer yes or no because there are so many unknowns."

Three times in the past eight years, Texas lawmakers have attempted to tackle the problem of balance billing by first establishing and then expanding and fine- tuning the mediation process. In May, Gov. Greg Abbott signed the latest version.

Many consumer protections have been enhanced, such as including more medical specialties and facilities, and dropping the threshold of disputed bills to $500 from $1,000. But concern remains that the process is still cumbersome for patients and adds more stress during a vulnerable time.

"It's like mom and dad fighting, and we are saying the kids have to get the parents to go to counseling," said Stacey Pogue, a senior policy analyst for the Austin-based Center for Public Policy Priorities. "The kids aren't causing the problem, and the kid doesn't have the power to fix it."

Smithee acknowledged that any legislative action to remove patients from mediation would face stiff headwinds from some doctors who fear they would lose advantage against the more powerful insurance industry.

Oliverson falls at least partly into that camp. He sees positives in having patients involved because they can contribute to the resolution.

Doctors say they balance bill patients only as a last resort to come closer to recouping their actual costs. They complain they are being shut out of narrowing insurance networks and insurers offer unrealistic "take-it-or-leave" reimbursement rates.

Insurers fire back that doctors, especially those in emergency settings where patients have no way of knowing in advance who will treat them, are intentionally resisting joining networks so they can bill at higher rates.

Carefully planned expenses

The Chronicle reported that in Texas, 48 percent of overall claims from emergency room physicians were outside the networks of the state's three largest insurers, Blue Cross and Blue Shield of Texas, Aetna and UnitedHealthcare, according to internal claims data compiled by the Texas Association of Health Plans, the state's health insurance trade association.

That compares with less than 10 percent in virtually every other specialty, with many like obstetrics-gynecology as low as 3 percent, the data showed.

Economists for the Federal Trade Commission found that the likelihood of Texas patients getting an out-of-network bill after out-patient emergency room treatment is 27 percent - nearly double the national average of 14 percent.

"I believe the (Chronicle) article hit home with many people living with multiple sclerosis. They have higher-than-average health care needs," said Simone Nichols-Segers, senior manager of advocacy for the national Multiple Sclerosis Society. "They face extraordinarily large health care costs, even with insurance."

"Most families with MS carefully plan for their expected medical expenses each year, and getting a 'surprise' out-of-network bill from a necessary ER visit can be financially devastating for them," she said.

Blake Hutson, associate director of AARP Texas, would like to see the state follow the lead of others where mediation is automatically triggered when patients get certain surprise bills. Currently only about 1 percent of Texans who could use the process do so, something he blames for the lack of awareness and difficulty navigating the system.

"Texas has a good mediation process," he said, "if you can get in the door."

Jenny Deam came to the Houston Chronicle in March 2015 from Denver, trading thin air for thick. She writes about the business of health care and has been nationally recognized for her coverage of how insurance practices and the shifting health care landscape affect the people of Texas. Prior to joining the Chronicle she was a special correspondent for the Los Angeles Times based in Denver where she wrote about school shootings, the Aurora movie massacre and its aftermath, and the early days of Colorado’s legalization of marijuana. She has been a reporter for the Denver Post, the Tampa Bay Times and the Kansas City Star. She has written for a wide range of regional and national magazines, including an award-winning investigation into how health insurers charge women more than men for the same coverage or deny them altogether, and a profile of the reluctant journey of a Virginia Tech survivor to become a national voice for gun law reform. She is a graduate of Washburn University